Is Bitcoin a Money Laundering Machine? Bitcoin trumpets itself as being totally anonymous. Facts speak otherwise. New Bitcoin World tackles the issue in Can code and competition build a better Bitcoin? Everyone from the mainstream media to Wikileaks to the now-disbanded hacker collective LulzSec has trumpeted Bitcoin as "anonymous." But the truth is that researchers have long since proven it's anything but — since every bitcoin transaction appears on a public ledger distributed to everyone in the network (called the "block chain"), tracking bitcoins back to individuals is often trivial. Zerocoin promises true anonymity by giving Bitcoin its own built-in money laundering system. The special sauce is a zero-knowledge proof, a statement used to verify a piece of secret information without giving away the secret in the process. This makes it so that if someone looks at the blo...